Sydney-based retail rewards startup Incent has partnered with 345 online stores, including the likes of Europcar, Sketchers, Sephora and adult store Black Label, to offer shoppers cash back in cryptocurrency, and already has some 5000 users on its platform.
Co-founder and chief executive of Incent, Rob Wilson tells StartupSmart the idea behind the reward platform was to “find an area of everyday life where cryptocurrency adds value to ordinary people”.
By using the platform, online shoppers can receive rewards in the form of Incent tokens, or INCNT, to the tune of anything from 1% of their spend (at Qatar Airways) to 12.5% (at Tappa Wallet).
Currently, earned INCNT can be saved or gifted, or redeemed for other currencies via external platforms. However, Incent is working on a solution that would also allow the tokens to be spent at participating stores, or donated to charity.
The brainchild of Wilson and co-founder Jins Kaduthodil, Incent Loyalty originally began as an offshoot of Wilson’s previous startup, bitcoin merchant directory BitScan.
The company was officially founded in 2017, following one of Australia’s very earliest initial coin offerings in October 2016, when it raised $1.1 million worth of Bitcoin and Waves. This raise allowed the startup to “build at a speed and scale that we wouldn’t have imagined would be possible”, Wilson says.
Now, the startup has a team of 20 people, half of whom are full-time developers. They also have a finance director and in-house marketing and sales teams.
“We’re well-equipped to take the product to market,” Wilson says.
Incent’s first consumer-facing app was launched in February 2018, allowing users to sign up to a tracking toolbar, which rewards them with $0.01 for every minute they spend browsing the internet, up to a maximum of $1 per day.
Wilson says the toolbar was created to “prove to ourselves that consumers would do something in return for INCNT”, and has attracted more than 5000 users, organically and through word-of-mouth, since February.
In April, the Incent marketplace went live, allowing users to be rewarded with INCNT for shopping online at any of the 345 online retailers involved. All of the merchants were onboarded through an affiliate.
Among these users, the average wallet size is about $120 worth of INCNT, 20% of which has not been earned, but represents the token’s increase in value.
Changing a ‘crazy’ system
Incent chose to focus on the loyalty and retail rewards space simply because it was a “soft target”, Wilson says, who believes current offerings represent poor value to both the merchants and consumers.
Consumers are rewarded with points that are only worth something at a particular store, and often with restrictions, while merchants can find themselves “hoping points aren’t redeemed”, he says.
“It’s a crazy system that nobody likes. Loyalty points must be the most restrictive value there is.”
Cryptocurrency, however, is the opposite, he says. It’s traded on international markets 24 hours a day, and can be traded almost instantly for a minimal fee.
“If we could apply that, if we could make it simple for merchants to reward consumption with cryptocurrency, they would be giving consumers something they really value,” Wilson says.
And because of this, according to Wilson, the retailers will likely still see those return customers.
“They’re not coming back because they have to, but because they want more of that value,” he says.
This kind of blockchain-based loyalty scheme could also offer offer an easy way in to the cryptocurrency space, particularly for the younger demographic who are “highly crypto-aware”, Wilson says.
According to Wilson, there are still significant barriers to entry when purchasing cryptocurrency, which don’t apply when you’re simply earning it.
Incent users sign up through the website and can manage their INCNT earnings from there, without necessarily needing to know anything about how it works, or the economics.
“Just by going about your business, you’re being rewarded with cryptocurrency,” he says.
“In a strategic sense, it finds a reason for merchants to get interested in cryptocurrency, because it helps them sell more,” he adds. Giving consumers an asset in return is a safer bet than just rewarding them with cash.
“Give people a dollar, you’re probably never going to see that dollar again,” he says.
A global coalition
The next step for Incent Loyalty, and what Wilson calls the startup’s “highest priority”, is to make it possible for users to offload their INCNT in Australian dollars, or to trade it for another cryptocurrency within the platform itself, meaning Incent would effectively be working as the broker.
“We want people to be incentivised from as many points as possible,” Wilson says.
In fact, Wilson has a vision of ‘Mrs Smith’, an everyday consumer who is ultimately “able to pay for Christmas, or buy a family holiday because she was smart about where she spent, and was rewarded for doing so”.
And his ambition doesn’t stop at Australia.
“If this market continues to welcome us, then there’s potential to expand overseas. And then it gets really interesting,” he says.
The program is designed to build wealth for everyone involved, and that’s “a business that works best at scale,” Wilson says.
“It works the most powerfully if it’s a global loyalty coalition,” he adds.
This article was written by Stephanie Palmer-Derrien and was orginally published by StartUp Smart on 17/07/18. You can read the orginal article here.